In December 2021, the central economic work conference will set the tone for steady growth this year. On January 5, 2022, Han Wenxiu, deputy director of the China finance office, wrote in outlook that "stabilizing the macro economy is not only an economic issue, but also a political issue". On January 10, 2022, the national Standing Committee once again stressed "putting steady growth in a more prominent position", demonstrating the central government's determination to stabilize growth.
Steady growth, determination, financial resources and action.
How stable?
After the central economic work conference, the central bank, the Ministry of finance, the national development and Reform Commission and other departments made it clear that they should shoulder the responsibility of stabilizing the macro economy, and conveyed the upcoming steady growth policies of various departments in the form of special work meetings and interviews.
Stabilizing investment focuses on combining the 14th five year plan with new and old infrastructure.
In "constantly strengthening, optimizing and expanding China's digital economy", the general secretary stressed the need to speed up the construction of new infrastructure.
The national development and Reform Commission proposed to support old infrastructure such as energy, transportation and water conservancy and layout a number of new infrastructure projects, and solidly promote the construction of 102 major projects in the 14th five year plan.
The Ministry of housing and urban rural development proposed to strengthen the promotion of "new urban construction", vigorously develop the construction of indemnificatory rental housing, and promote the transformation of old communities.
The Ministry of industry and information technology proposed that we should not only transform and upgrade traditional industries, but also cultivate a number of national advanced manufacturing clusters in the fields of electronic information, high-end equipment, automobiles, new materials and so on. Expand the number and scope of "specialized and special new" enterprises, make good use of the central financial funds, and cultivate about 3000 "little giant" enterprises.
Where did the money come from? Fiscal expenditure + special bonds, with the total amount and structural monetary policy working together
We will accelerate the progress of fiscal expenditure and make good use of special bonds. Maintain appropriate expenditure and accelerate the progress of expenditure. By November 2021, the national general public budget revenue has reached 96.8% of the budget at the beginning of the year, and the annual fiscal excess is basically a foregone conclusion, which also provides support for this year's fiscal development. The 1.2 trillion yuan of special bonds issued in the fourth quarter of 2021, together with the 1.46 trillion yuan quota issued in advance, is expected to form more physical workload in the first quarter of this year.
Aggregate and structural monetary policies work together. In the fourth quarter, the central bank's Monetary Policy Committee proposed for the first time to "give full play to the dual functions of the aggregate and structure of monetary policy tools". In terms of aggregate policy, there have been moves to reduce reserve requirements and interest rates. On December 6, 2021, the central bank announced an overall standard reduction of 0.5 percentage points. On December 20, 2021, the one-year LPR decreased by 5 basis points to 3.8%, further supporting the real economy; On January 17, 2022, the central bank lowered MLF and open market reverse repo interest rates by 10 basis points and cut interest rates again. In terms of structural development, we should make good use of two direct tools and carbon emission reduction support tools. The first is to implement the Pratt & Whitney small and micro loan support tool. The second is to include the Pratt & Whitney small and micro credit loan into the management of agricultural and small refinancing. The original refinancing amount of 400 billion yuan can be used on a rolling basis, and the amount can be increased if necessary.
How do local governments implement it?
Beijing, Tibet and Henan have held two local sessions, emphasizing the expansion of effective investment in combination with the 14th five year plan and paying attention to both new and old infrastructure. Beijing proposed to "maintain the investment intensity of 100 billion yuan in urban sub centers" and "strengthen new infrastructure such as computing algorithm platform and launch 20 major application scenarios". Henan stressed "expanding effective investment and completing fixed asset investment of 2.8 trillion yuan throughout the year" and "promoting the construction of 64 major new infrastructure projects with an investment of more than 1 billion yuan and building 40000 5g base stations". Tibet said it would "strive to increase the scale of the digital economy by 10%" build an "five cities and three hours" economic circle and implement 14 key projects ".
A number of major projects have been started in Shanghai, Sichuan, Anhui and Zhejiang, and Fujian, Chengdu, Chongqing, Ningxia and Henan have stepped up the deployment of projects to be started in 2022. In 2022, the total investment in major projects in Shanghai will reach 429.4 billion yuan. In the first quarter of 2022, Sichuan Province organized 100 major projects with a total investment of more than 1 billion yuan, with a total investment of 232.2 billion yuan. The first batch of major projects in Anhui Province started intensively, with a total investment of 376.06 billion yuan and a planned investment of 126.25 billion yuan in 2022. Zhejiang Province will expand effective investment in 358 major projects in 2022, with a total investment of 638.6 billion yuan. The total investment of the projects started in the above four provinces and cities is nearly 1.7 trillion yuan.
How's it going? The commencement of key projects has accelerated, and steady growth has begun
In the report "two new and one heavy" for steady growth, we proposed that the focus of steady growth this year is the "two new and one heavy" project. At the beginning of the new year, project investment and scale construction plans were released one after another.
New urbanization construction
The renewal and reconstruction of underground pipe network has been started, and the reconstruction project of old community is progressing smoothly. In the second half of 2021, Beijing, Shanghai, Hangzhou and other cities will touch and arrange the underground pipe network. It is expected that the transformation process will officially begin in 2022. In terms of old transformation, during the 14th Five Year Plan period, it is planned to complete the transformation of 219000 old urban communities built before the end of 2000, and it is estimated that about 40000 old urban communities will be transformed every year from 2022 to 2025.
The construction of affordable rental housing was further accelerated. On January 11, 2022, Pan Wei, head of the housing security department, said at the press conference of the state information office that he would increase policy support for finance, land and public services and expand the supply of affordable rental housing. It is estimated that China will supply 2.79 million sets of affordable rental housing in 2022, driving an investment of 337.7 billion yuan.
New infrastructure construction
2022 will be the initial implementation period of the "14th five year plan" new infrastructure planning of provinces and cities, and the construction progress will be accelerated. In 2021, Sichuan, Jiangsu, Guizhou, Zhejiang and other provinces and cities successively issued new infrastructure planning schemes during the 14th Five Year Plan period. It is expected that more actual workload will be formed from this year. Take 5g base stations as an example. According to the information and communication industry development plan of the 14th five year plan, there will be 26 5g base stations per 10000 people in 2025, and the total number of base stations under the population of 1.4 billion is 3.64 million. By November 2021, more than 1.39 million 5g base stations had been built and opened in China, and the remaining 2.25 million base stations were to be built.
Major project construction
Major engineering construction projects mainly focus on the construction of water conservancy, energy and transportation facilities, and enter the centralized construction period in 2022. Specifically:
The construction progress of water conservancy projects is expected to accelerate. In 2021, the annual investment in water conservancy construction was 757.6 billion yuan, 150 major water conservancy projects have been approved, 67 have been started in total. On January 10, 2022, the national standing committee pointed out that "major water conservancy projects that have been demonstrated for many years in the early stage should be promoted and implemented quickly". According to statistics, the estimated total investment of 150 major water conservancy projects is about 1.29 trillion yuan, which can drive direct and indirect investment of 6.6 trillion yuan.
In the construction of energy projects, the coastal nuclear power and power transmission channel project has made rapid progress. Key nuclear power construction projects have basically entered the final stage of construction. Power transmission channel projects, such as Baihetan southeast UHV DC transmission project, are expected to be completed and put into operation in 2022.
The construction period of transportation power project is long, which will continue to stimulate investment. In terms of high-speed railway, for example, the construction of Shanghai Chongqing Chengdu riverside high-speed railway with a total investment of about 530 billion yuan will start in September 2021, and the planned completion date of Hanchuan Yichang section is September 30, 2025. Urban agglomeration and metropolitan area rail transit and civil aviation construction are still in the preliminary planning stage.
Risk warning: the epidemic risk exceeds the expectation; The policy launch was not as expected; The construction progress of some projects is less than expected.
